President Nana Addo Dankwa Akufo-Addo, the President of the Republic of Ghana is scheduled to deliver the State of the Nation address to the Parliament in Accra, Ghana’s capital on Tuesday, February 27, 2024, as stipulated by Article 67 of the 1992 Constitution of the country.
The State of the Nation Address, commonly known as SONA, offers President Akufo-Addo an opportunity to update the nation on various aspects, including the economic recovery program, infrastructural developments, and his commitment to ensuring a free, fair, and transparent election later in the year.
This annual address is a constitutional provision that mandates the President to convey a message on the State of the Nation at the commencement of each session and prior to the dissolution of Parliament. And it serves as a means for the President to provide an overview of the nation’s current state at the beginning of each session of Parliament.
The address is expected to highlight the government’s principal policy objectives for the year while providing insights into the strategies aimed at ameliorating prevailing economic conditions.
Earlier in February, the then Majority Leader, Osei Kyei-Mensah-Bonsu, announced this development in Parliament, stating, “Mr speaker in accordance with Article 67 of the Constitution, H.E the President will deliver to the house a message on the State of the Nation on Tuesday, February 27, 2024. Honourable Members are entreated to avail themselves for the task ahead.”
This address is significant as it allows the President to be held accountable to the citizens through Parliament, providing insights into the government’s achievements, challenges, and plans across different sectors.
This is coming on the back of the opinions of some schools of thought on the recent economic developments in the country. Whilst these schools of thought posit that Ghana’s economy has entered a full-blown macroeconomic crisis since 2022 as a result of pre-existing imbalances and external shocks, large financing needs, tightening of financing conditions aggravated by debt sustainability concerns thereby shutting-off Ghana from the international market. Large capital outflows combined with monetary policy tightening in advanced economies have put significant pressure on the exchange rate, together with monetary financing of the budget deficit, resulting in high inflation. They put it that these developments interrupted the post COVID-19 recovery of the economy as GDP growth declined from 5.1% in 2021 to 3.1% in 2022. The 2022 fiscal deficit was well above target at 11.8%. Public debt rose from 79.6% in 2021 to over 90% of GDP in 2022, as debt service-to-revenue reached 117.6%.
Hence, to help restore macroeconomic stability, Ghana has secured a three-year IMF Extended Credit Facility (ECF) program of about $3 billion and has embarked on a comprehensive debt restructuring. The authorities have committed to a frontloaded fiscal consolidation while pursuing a tighter monetary policy, complemented by structural reforms in the areas of tax policy, revenue administration, and public financial management, as well as steps to address weaknesses in the energy and cocoa sectors. The government also completed a Domestic Debt Exchange Programme (DDEP), implemented an external debt repayments standstill, and sought official debt restructuring under the Common Framework.
Other contrarian schools of thought, propose that Ghana’s economy is showing signs of recovery and is likely to grow by about 3.0% by the end of 2023, all things being equal.
They have indicated that the country’s agriculture sector’s resilience expresses hope for the success of policies aimed at involving the youth in agriculture.
Whilst they hold these opinions, they have however expressed concerns about the country’s fiscal matters. In this light, they have mentioned that while gross revenue has increased, reaching 15.8% of GDP, the rapid growth in expenditures, and the lack of prudent spending practices are sources of great concern.
They have also highlighted the adverse effects of excessive taxation on production, which has inadvertently promoted imports and exacerbated the prevailing high unemployment rate in the country.
According to an authority in the areas of Fiscal and Economic policy, excessive taxes on production are hampering the growth and competitiveness of domestic businesses and those in food and beverages are contributing to the rising cost of living in the country.
With these two opposing yet somewhat connected views on the current state of the Nation’s economy, Ghanaians await what will be communicated by the president in his State of The Nation Address later today. And hence pick a cue on the way forward for the Nation.
Source: www.worldbank.com , www.ug.edu.gh , Institute of Statistical, Social and Economic Research (ISSER)
